Michigan Association of County Treasurers

Transcription

1 Michigan Association of County Treasurers Summer Conference - Boyne August 8, 2011 Michigan Dept. of Treasury Roxanne Nicholas, Senior Auditor 1 From the Michigan Department of Treasury What will we cover? Accounting for Jail Inmates Accounting for Jail Commissary Funds Accounting for Drug Forfeiture Funds County Treasurer s Responsibility for Trust Accounts Updates on Escheating 2

2 Accounting for Jail Inmates A draft numbered letter is in the process of being approved. 3 Accounting for Jail Inmates The Inmate Trust Fund may be found in counties that have a jail facility. The accounting for funds belonging to inmates lodged at the county jail is the responsibility of the county sheriff. Such moneys must be deposited with the county treasurer. The sheriff office has the responsibility for the individual inmate accounts and for authorizing payments of these moneys by the county treasurer or from an imprest inmate trust bank account with subsequent replenishment of the imprest accounts. 4

3 Accounting for Jail Inmates 5 As inmates are admitted to the jail, their personal funds are place in this trust fund. Friends and relatives may also make deposits for the benefit of an individual inmate. Money may be withdrawn only for the benefit of the particular inmate. Each withdrawal must be properly authorized. Written procedures must be established for the handling of these funds to safeguard the inmate s money held in trust. This fund must have its own depository bank account that is reconciled monthly. Individual inmate accounts must be maintained and reconciled to the total of the depository bank account. Accounting for Jail Inmates Accounting procedures are similar whether the money is in the custody of the sheriff or the county treasurer. All inmate funds should be placed in a bank account and all disbursements made by check. 6

4 Accounting for Jail Inmates Receipting: Official pre-numbered receipts (or computerized equivalent) should be obtained. The heading on the receipts should include the name of the department (sheriff), name of the county, and the type of account, such as Inmate Funds or Inmate Trust Account. A receipt is prepared in duplicate for all moneys taken from the inmate at the time of incarceration and other moneys received on behalf of the inmate. The original is for the inmate or the person depositing the money on behalf of the inmate. The duplicate is retained at the receipt book. An inmate must be informed of moneys deposited in his behalf by another party. 7 Accounting for Jail Inmates 8 Bank Deposits: Money should be deposited intact and daily if at all possible. This means the deposit should equal exactly the amount collected and receipted for. Bank accounts should be reconciled monthly. Bank reconciliations are done by sheriff department. Make sure that your auditor is aware of those accounts and that they are being reviewed as part of the audit.

5 Accounting for Jail Inmates 9 Checks: Pre-numbered checks are essential. All moneys collected are deposited in a bank account. All payments are made by check. This includes any purchases made on behalf of an inmate and amounts returned to the inmate upon release from jail. Where moneys are deposited on behalf of an inmate by another party, it should be ascertained whether any remaining moneys are to be paid to the depositor or to the inmate upon release from jail. This should be stipulated in writing at the time of the deposit. Accounting for Jail Inmates 10 Purchases and/or Account Withdrawals: It is not necessary that a separate check be issued for each account withdrawal, except payment of the account balance upon release from jail. A voucher, shopping list, order form, etc., may be used where the amounts to be charged to individual inmate accounts are compiled in a single document. Such document or listing must include the signature of the individual inmate to insure that account withdrawals are properly authorized. A single check may be written for the total amount to be paid and the individual inmate accounts may be charged from the listing. When an inmate is released from jail, a voucher or check authorization form must be prepared to authorize payment of the individual account balance. The check number should be placed on each listing or voucher and all of the documents filed and retained for audit purposes.

6 Accounting for Jail Inmates 11 Individual Accounts: The sheriff must insure that an account is maintained for each individual inmate. This record should include the date, receipt or check number, amount received, amount paid out, and the balance. Each receipt written is posted to the applicable account. Withdrawals, or charges, are entered from check copies, vouchers, or other listings. Balances on the accounts are computed after each posting. The total of the individual accounts should at all times equal the amount on cash on hand and in the bank. Accounts should be reconciled monthly with the bank balance plus cash on hand, if any, and also reconciled by the detail of the open inmates accounts. Accounting for Jail Inmates 12 Imprest Cash: Where numerous small purchases are necessary, the sheriff may authorize an imprest cash fund from the inmate funds. Under this procedure, a check is written from the account for the amount to be used as imprest (petty) cash. It is necessary that each payment from this cash fund be supported by a signed voucher. On the basis of such vouchers, the imprest (petty) cash is replenished from time to time. The amount in this fund should at all times equal the cash on hand plus paid vouchers on hand. Where this system is used, individual accounts should be charged from the signed petty cash vouchers.

7 Accounting for Jail Inmates Budget Requirements: An approved budget is not required for this fund. 13 Controls Where possible, deputies or other personnel working at the jail (or sheriff department) should be assigned accounting duties in a manner to insure that all moneys are properly accounted for. For instance, the individual who writes receipts and makes bank deposits should not prepare the bank reconcilements; those who post individual accounts should not handle the cash or write checks; those who prepare disbursement vouchers should not write the checks. Checks will be signed by the sheriff or any other individual(s) designated by the sheriff. Accounting for Jail Inmates 14 The use of a checking account (as previously explained) for the money of inmates held for a period of less than 24 hours may be cumbersome for the added internal control obtained from the use of the bank account. The following procedure could be used in lieu of the bank account. Other procedures or deviations from this suggestion could be developed that provide control for the safekeeping of inmates valuables as well as administrative efficiency. The inmate s property and valuables could be stored in an envelope with the details written on the outside. You could also use a cover sheet with a duplicate in which on copy could be kept in the inmate file and the second sheet given to the inmate or to a transfer agency. Receipts in at lease duplicate should be prepared and signed by the inmate for partial withdrawals of valuables or money. A copy should be retained in sheriff files and the other put in the inmate s envelope (file).

8 Accounting for Jail Inmates It is very important to make sure that everyone that might be handling inmates valuables or personal property is bonded. 15 The inmate does have the right to retain currency and coins that have a collectors or keepsake value. Examples are silver certificate currency, gold coins, etc. These valuables should be retained for and returned to the inmate. They should not be deposited in a financial institution. List the description of the item including date, value, serial number, etc. as applicable to specifically describe the item(s). Accounting for Jail Commissary Funds A draft numbered letter is in the process of being approved. 16

9 Accounting for Jail Commissary Funds 17 The accounting for funds for the operation of the commissary at the county jail is the responsibility of the county treasurer and county sheriff. Such moneys must be deposited with the county treasurer. The sheriff is responsible for inventory control and accounting records, properly charging the inmate accounts for commissary purchases and proper accounting for the receipts of the commissary. Accounting for Jail Commissary Funds All commissary funds should be placed in the Jail Commissary Fund (595) by the county treasurer. 18

10 Accounting for Jail Commissary Funds 19 Establishment--The Jail Commissary Fund is established by resolution of the county board of commissioners. The establishing resolution should provide guidelines for the operation of the commissary, types of inventory to be maintained, markup, sales tax license, and authorized use of the profits of the commissary. The county sheriff may be authorized to purchase inventory and other items for resale to the inmates. Purchase of items for resale to the employees of the county must be prohibited. The county board of commissioners must review and approve any expense of the commissary and any use of the profits. Accounting for Jail Commissary Funds Receipting--Official pre-numbered receipts should be obtained. The heading on the receipts should include the name of the department (sheriff), name of the county, and the name of the fund, Jail Commissary Fund. A receipt must be prepared in duplicate for all moneys transferred from the Inmate Trust Fund for purchases from the commissary and for any other sales, refunds or other commissary revenue. The duplicate is retained in the receipt book. 20

11 Accounting for Jail Commissary Funds Deposits--Money should be deposited intact with the county treasurer on a timely, routine basis. Intact means the deposit should equal exactly the amount collected and receipted for. 21 Accounting for Jail Commissary Funds 22 Imprest Checking Account--An imprest checking account may be established for the purchase of small inventory replenishment purposes. Most payments from the Fund must be made through the county purchasing system and with the appropriate approvals. Prenumbered checks are essential. It is necessary that each payment from this imprest checking fund be supported by a signed voucher and/or original vendor receipt. On the basis of such vouchers and/or original vendor receipts, the imprest checking account is replenished from time to time. The balance in the bank account plus paid vouchers on hand must at all times equal the imprest amount established for this fund. The bank account must be reconciled monthly and should be done by the county treasurer's office. The sheriff department must provide a listing of checks issued each month for reconciliation purposes.

12 Accounting for Jail Commissary Funds 23 Controls--Deputies or other personnel working at the jail (or sheriff department) should be assigned accounting duties in a manner to insure that all moneys are properly accounted for. For instance, the individual who writes receipts and makes bank deposits should not prepare the bank reconcilements; those who post individual accounts should not handle the cash or write checks; those who prepare disbursement vouchers should not write the checks. Checks will be signed by the sheriff or any other individual(s) designated by the sheriff. Accounting for Jail Commissary Funds What happens when the fund builds up? Counties should not purchase large items directly from this fund. If there is an excess of amount from this fund, the Board of Commissioners may appropriate the funds to the General Fund for purchases that directly support the jail. Examples are: Surveillance camera system for the jail Fuel for transporting inmates Palm scanning equipment Inmate transportation vehicle It should be noted that if there is a purchase made through the general fund (using funds appropriated from the Jail Commissary) and there is an amount not covered, it is the General Fund s responsibility to cover. 24

13 Accounting for Drug Forfeiture Funds Refer to Treasury Numbered Letter The Drug Forfeiture Account and Fund are under the control of the county treasurer. The fund number is 265. This fund is mandatory if the unit has received forfeited assets. This fund must be established by resolution of the governing body of the unit. This is a special revenue fund. 25 Accounting for Drug Forfeiture Funds 26 The money and proceeds from the sale of seized property in substance abuse criminal complaints (as specified in MCL a) and optional county appropriations are deposited into fund number 265. The expenditures and a budget for this fund should be approved by the board of county commissioners. There is limited usage (for drug law enforcement) of its assets.

14 Accounting for Drug Forfeiture Funds 27 Funds should not be credited to an expenditure account when they come in (this circumvents the budget process). This fund may be found in any county or local unit having budgetary authority over an agency which may seize property involved in the violation of controlled substance statutes. Money for the operation of this fund is normally supplied by forfeited money, negotiable instruments, securities, and the proceeds of the sale of the other property and articles of value. Accounting for Drug Forfeiture Funds Expenditures include payments for expenses of seizure, forfeiture and sale. The available balance is to be used to enhance law enforcement efforts pertaining to controlled substances. 28

15 Accounting for Drug Forfeiture Funds 29 Each year, local units of government are required to report certain asset forfeiture information by February 1 to the Grants Management Section of the Michigan State Police. Even if a local unit does not effectuate any forfeiture proceedings during the fiscal year, local units are asked to fill out the identification section of the form, indicate that there were no forfeiture proceedings and return it. The form is available at (Byrne JAG Grant Funding/Forms). This is usually completed by the sheriff office. 30

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17 33 Accounting for Drug Forfeiture Funds 34 We recommend that the board of county commissioners or committee of the board, prosecuting attorney, sheriff, and county treasurer (or clerk who will give input into the record keeping procedures) meet and establish written procedures for the use and operations of the money in this fund. The procedures may allow the sheriff to have sufficient imprest cash for use on an emergency basis to make drug purchases.

18 Accounting for Drug Forfeiture Funds 35 Care must be taken to protect the law enforcement effort and names of individuals. This can be accomplished by the assignment of a number or code name for specific expenditures. They can be approved jointly by the sheriff and prosecuting attorney or other procedures deemed in the best interest of law enforcement and with sufficient internal accounting control over the assets of this fund. Note that state statute states shall be distributed by the court having jurisdiction over the forfeiture proceedings to the entity having budgetary authority over the seizing agency. County Treasurer s Responsibility for Trust Accounts Refer to Dick Baldermann s handout to this conference from

19 County Treasurer s Responsibility for Trust Accounts 37 MCL states, It shall be the duty of the county treasurer to receive all moneys belonging to the county, from whatever source they may be derived, and all moneys received by him for the use of the county, shall be paid by him only on the order of the board of supervisors, signed by their clerk, and counter signed by their chairman, except when special provisions for payment thereof is or shall be otherwise made by law. District Courts: The most common two bank accounts established for each District Court are the Bond (or trust) Account and a District Court Control Unit Depository Account in accordance with the Michigan State Court Administrative Reference Guide Michigan Department of Treasury Uniform Chart of Accounts Fund 760 District Court Fund-may be established by resolution of the legislative body of the local unit at the request of the court. Bank account may be established only when the account is necessary. County Treasurer s Responsibility for Trust Accounts (continued) It is important that these bank accounts be reconciled at least monthly. The Bond Account should be reconcile to the open individual bonds which make up the reconciled bank balance at the end of the month. Friend of the Court The UCA does not define a specific fund number for the Friend of the Court Trust Fund, however a open trust and agency fund number may be used. The State Court Administrative Reference Guide authorizes one bank account for the friend of the court offices Friend of the Court Trust Account. Financial Reporting of All Court Trust Funds Michigan Committee on Governmental Accounting and Auditing Statement 4 Definition of the County Financial Reporting Entity 38 These accounts usually maintained by county court personnel in their official capacity as county court employees should be reflected in the financial statements of the county.

20 County Treasurer s Responsibility for Trust Accounts The County Treasurer is responsible for the bank reconciliations for all bank accounts except Jail Inmate, District Court Bond and District Court Depository. 39 County Treasurer s Responsibility for Trust Accounts 40 Pursuant to the previous discussion, following is a list of bank accounts which are currently being used by the courts which should be in the county treasurer s name and be reconciled by the county treasurer or by court personnel and a copy provided to the county treasurer. Circuit Court Court Ordered Account(s) District Court Depository Account Bond Account Court Ordered Account(s) Friend of the Court Support Payment and Trust Account Court Ordered Account(s) Probate Court Court Ordered Account(s)

21 Updates on Escheating 41 A recent change in the Uniform Unclaimed Property Act, PA 29 of 1995, has moved the reporting dates and shortened the dormancy periods of most properties, beginning in Regardless of property types, all government entities must report all properties after one year of dormancy. Although there has been a change in reporting, the accounting is the same as in the past. Updates on Escheating The program is administered by the Michigan Department of Treasury and it serves as the State of Michigan s central depository for abandoned and unclaimed property. 42

22 Updates on Escheating The Michigan Department of Treasury, Unclaimed Property Division (UPD) released an updated Manual for Reporting Unclaimed Property in May The following The link to the new manual is: For more specific questions, call (new phone number for holders). The telephone number for claiming property is

23 Updates on Escheating Interest will be charged for holder reports filed after the July 1 due date and for individual properties contained in the holder report which, in accordance with the applicable dormancy period, should have been reported and remitted in prior years. 45 Updates on Escheating What s new? Beginning in 2011, the due date for the annual unclaimed property report (holder report) will change from November 1 to July 1 for property reaching its dormancy period s of March

24 Updates on Escheating The dormancy period for most property has been shortened to three years. Unclaimed property reaching the new dormancy periods as of March 31 must be reported and remitted to the State on or before July 1. Entities having no unclaimed property reportable under the Uniform Unclaimed Property Act must complete Form 4305 and file it with the Michigan Department of Treasury by July 1. Form 4305 is available on the web. 47 Updates on Escheating CD-ROM is the preferred reporting media for submitting Holder Reports. Paper reporting is allowed only if reporting fewer than ten properties for the entity each year. Filing on diskette will continue to be accepted for 2011 reporting, but we encourage holders to take steps to upgrade their technology to allow for CD-ROM reporting in future years. Holders should not report and remit worthless securities as unclaimed property. 48

25 Updates on Escheating 49 Highlights of the reporting process: The main objective of the UPD is to reunite owners or heirs with their lost or forgotten funds. UPD s goal is to process claims in less than 90 days. Michigan law requires holders to send written notice to owners at their last known address informing them that they hold property subject to being turned over to the State. This requirement applies if all of the following conditions exist: The address for the owner does not appear to be inaccurate. The property has a value of $50 or more. The statue of limitation does not bar the claim of the owner. Updates on Escheating 50 For property where the owner is not known, enter unknown in the Last Name field. List any descriptive or identifying information in the Property Description field. Copies of reports and supporting records must be kept for ten years. A person who fails to pay or deliver property within the time prescribed by the act shall pay interest at the current monthly rate of one percentage point above the adjusted prime rate, per year, per month, on the property or value of the property, from the date the property should have been delivered.

26 Updates on Escheating 51 Who should report? The Uniform Unclaimed Property Act is silent as to what official has the responsibility to complete the report and escheat unclaimed property to the State of Michigan. MCL states, the person holding property presumed abandoned and subject to the State s custody as unclaimed property under this act shall report to the administrator (State Treasurer) concerning the property as provided in this section. However, in other statutory provisions, the local governmental unit treasurer has the statutory responsibility as the custodian of all funds in the local unit of government. Updates on Escheating 52 For example, outstanding checks, drafts or similar instruments not cashed for 90 days or older that are payable in the General Fund should be transferred to the Trust and Agency Fund. The Uniform Chart of Accounts requires that the amount of the outstanding checks that are abandoned and to be escheated to the State be maintained in account number 268 Escheatable Money within the Trust and Agency Fund. A detailed list would be maintained of the transferred outstanding checks and then reconciled on a monthly basis as part of the bank reconciliation process.

27 Updates on Escheating In a county, the county treasurer would have the responsibility to complete the report under MCL as the person holding the property presumed abandoned and subject to the State s custody as unclaimed property under this act. In the case of the county, a letter should be sent to the various departments directing them to send all unclaimed outstanding checks over 90 days old to the county treasurer for deposit into the Trust and Agency Fund as Escheatable Money. 53 What we covered Accounting for Jail Inmates Accounting for Jail Commissary Funds Accounting for Drug Forfeiture Funds County Treasurer s Responsibility for Trust Accounts Updates on Escheating 54

28 Any Questions? You may contact me directly: Roxanne Nicholas Soon to be: 55